It’s no secret that being a first-time home buyer in the Toronto real estate market can be incredibly frustrating and time consuming. Navigating the intricacies of various strategies and the intense competition can make even the strongest person stressed out. Jumping into a home search requires a lot of prep work, but figuring out how to effectively climb the property ladder and achieve your real estate goals, requires the help of an experienced realtor.

Nested has years of experience working with first-time home buyers. The biggest hurdle we face with these clients, is managing budget expectations. What type of house can actually be afforded that won’t make our clients completely mortgage poor. The reality is, unless there is an unlimited budget, as a Toronto home buyer, you will need to make compromises and have a strategic plan to climb the property ladder.

So, after years of saving for a down payment for your first property and considering all the good and bad of home ownership, you are ready to start house hunting. Let’s do it!

Avoid the 3 biggest mistakes many first-time home buyers make:

1) Waiting for the market to drop

Somehow the Toronto real estate market always wins! The primary reason for this is that the Toronto real estate market has seen very small fluctuations over many, many years. These are almost impossible to time and waiting for this could completely price you out. Buying the best type of property that your money can buy, a condo vs a house OR a semi over a detached, is the only way to start climbing the real estate ladder and building your equity.  As prices keep rising, we see many people waiting for prices to drop, only to end up priced out of their original budget.

For more information on the Toronto real estate market check out this recent blog post.

2) Waiting to save for a bigger down payment to get more house

If you can’t afford the house of your dreams right now, waiting to save more down payment will almost definitely cost you more money in the long run. The Toronto real estate market moves at the speed of light and prices are increasing at a minimum of 10-12% every year. The question you need to ask yourself is “Can my savings plan surpass this?”

Set some realistic goals for yourself and understand that it’s ok to start out small with the intention to improve. If you can’t afford a detached home, buy a semi and commit to staying there for a minimum of 7-10 years. If you are adding renovations and some serious equity to your house, upsizing to a larger home could be quicker than you think. As a first-time buyer, your ultimate goal should always be to get into the market and buy a house you can comfortably afford.

For more home buyer tips read Top 3 Things Every Toronto Home Buyer Must Know in 2021!

3) Buying too much house for current needs

If you can’t afford the house of your dreams , for example, a fully renovated detached home with a private drive, will you ever? Chances are no, unless you get into the property market and start gaining some valuable equity.  Analyze your current needs and set clear 5 and 10 year goals – Are you planning to leave the country for work? Are you planning to start a family? The reality is you don’t need a massive house if it’s just for 2 people. If your goal is to have kids in the near future, by the time 2 becomes 3 or 4, or even 5,  you will have a minimum of 5-7 years to gain the needed equity to comfortably upsize to a larger home.

The bigger your house, the more expensive maintenance will be. Property taxes, utility costs, and the general maintenance of owning an older Toronto home, is something to seriously consider when evaluating affordability. With older homes, and even some newer ones, there’s always something to fix. This is something to keep in mind as you prepare your list of wants and needs for your next home purchase.

So take it from us, your goal as a first time home buyer should always be to get into the market, even if you have to make some big compromises. Getting into the market will give you the best chance possible to start climbing the property ladder and reach your real estate goals.

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